IGCSEMathsEdexcelMaths BRevision NotesNumberRepeated Percentage ChangeDepreciation

Depreciation (Edexcel IGCSE Maths B): Revision Note

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Roger B

Written by: Roger B

Reviewed by: Jamie Wood

Updated on

Depreciation

What is depreciation?

  • Depreciation is a type of repeated percentage change

  • It refers to the value of something decreasing by percentage amounts over time

    • E.g. the value of a car, a laptop, or a mobile phone

  • The time period for each change is often a year

    • But changes may also occur monthly, weekly, etc.

    • An exam question will specify what the time period is

  • The rate of percentage decrease may be constant, or may vary from period to period

  • Depreciation questions are answered using the usual techniques for repeated percentage change

    • Just be sure to answer in the context of the question

Worked Example

A car was bought for £30 000.

It depreciated by 12% in the first year.

It then depreciated by a further 8% each year for the next two years.

Calculate the value of the car three years after it was bought.

Answer:

This is a depreciation question, so it is an example of repeated percentage decrease

The percentage multipliers are

  • 0.88 for a decrease of 12%

  • 0.92 for an decrease of 8%

These decreases occur one after the other

  • First a decrease by 12%

  • Then two successive decreases by 8%

So multiply 30,000 by 0.88cross times0.92cross times0.92 (or 0.88cross times0.922)

30000 cross times 0.88 cross times 0.92 squared equals 22344.96

£22 344.96

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Author
Reviewer
Roger B

Author: Roger B

Expertise: Maths Content Creator

Roger's teaching experience stretches all the way back to 1992, and in that time he has taught students at all levels between Year 7 and university undergraduate. Having conducted and published postgraduate research into the mathematical theory behind quantum computing, he is more than confident in dealing with mathematics at any level the exam boards might throw at you.

Jamie Wood

Reviewer: Jamie Wood

Expertise: Maths Content Creator

Jamie graduated in 2014 from the University of Bristol with a degree in Electronic and Communications Engineering. He has worked as a teacher for 8 years, in secondary schools and in further education; teaching GCSE and A Level. He is passionate about helping students fulfil their potential through easy-to-use resources and high-quality questions and solutions.